Graphic Evidence: Orsus Doubles on Nothing

Chart: Zignals.com

by Paul Springer

Stock in Orsus Xelent Technologies Inc. (ORS) rose a whopping 100% Monday. The rise occurred on almost two million shares traded.

Recent months have seen some nasty surprises for Chinese reverse merger companies, and it seems like one takes a beating about once a week on bad news in the form of a report created by someone ultimately discovered as short the stock.

But an even more remarkable phenomenon is the inexplicable rise of some companies’ stock on no news at all.

Orsus sells cell phones, and it is a tiny player at that. It’s in a market dominated by behemoth manufacturers and complicated contracts that bundle phones with carriers.

The company formed in 2005 through a reverse merger with defunct online dating service Universal Flirts Corp.

On an annual basis, the company has been gradually losing more money the last couple of years. On a quarterly basis, the most recent figures indicate a net profit on dwindling revenues – certainly nothing investors would typically double down on.

Triple-digit gain, when they do occur, tend to take place on low volume and on the over-the-counter market knows as the Pink Sheets. Orsus traded two million shares and is listed on the NYSE/AMEX. However, the exchange notes that Orsus does not comply with listing requirements due to low share price, financial impairment, amount of equity and years of losses.

It gets better. The company said in a news release in March that the company may sell itself off or merge to deal with poor cash flow and going concern issues.

Given Monday’s eery lack of news on this company, one wonders who is trading the stock. And whether the exchange is looking into the dramatic jump. (As of Monday night, the NYSE’s website hadn’t picked up the move, showing a last trade from the previous Friday.)

Many Chinese reverse merger companies have been exposed as frauds that have little in the way of actual operations in China. But the trading of these stocks is just as questionable sometimes, and that activity takes place in the U.S., where an ancillary industry of trading fraud has taken root.

In the case of Orsus, it remains to be seen why the stock gained 100% on Monday. Absent a safe and sane form of inquiry, the financial funhouse of Yahoo Finance’s chat boards is full of answers. Manipulation is one of the stronger threads running through the conversation, which is admittedly long on theories and short on fact.

But if you graph the stock back to the end of May, a distinct pattern repeats itself three times. And it does look an awful lot like someone whipping and driving the stock to a high in a one or two-day period, then walking it down step by step over a longer period.

Who? Why? Well, actually we probably know why…

And here’s sampler of explanations from various posters on Yahoo Finance who think they have the answers. To better capture the sophistication of this community, note that we’ve kept all grammatical and spelling mistakes as we found them:

ORS is likely to get halted, bankruptcy.

Can people even read a press release? Sales down 50%. They had a LOSS again for the QTR. They have no cash. What’s likely to happen is the common is going to get wiped out. Go gamble, go ahead. Unbelievable, look at the numbers people.

Trading groups from twitter flocking together and buying and selling to each other gradually sucking in sheep. Then they sell and go short and kill the newbies.

STOCK WILL GO BACK DOWN ALWAYS DOES. Wait and see.

New bagholders get made here every time.

CHECK THE CHART YOU WILL BE BLED TO DEATH IN THE COMING WEEKS.

I’d rather play Black Jack. This stock is a pure scam.

What is up with these trading groups? They get $2 million together and buy the whole float and have to move it over and over so they don’t have to report ownership. God, these guys stink. Pump and dump—run it up sucking in newbies then sell and short.

Rinse and repeat. Criminals.

After closing at $3.08 Monday, Orsus shares ended the Tuesday trading session down 27.60%.

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